Construction Defect Settlement in Seattle
June 28, 2013 —
CDJ STAFFThe Seattle Post-Intelligencer reports that a settlement has been reached in the Mosler Lofts construction defect claim. The settlement received by the homeowners was for about $8.5 million, which will used for repairs of the construction defects and for paying their legal costs.
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Surge in Home Completions Tamps Down Inflation as Fed Meets
June 17, 2015 —
Carlos Torres – BloombergAmerican builders are tamping down what little inflation there is.
Construction companies completed 392,000 buildings with five or more units at an annualized rate in May, the most since 1988, Commerce Department figures showed Tuesday in Washington.
“The pickup in demand is pushing up rents and also creating more incentive for builders to put up more units,” said Michael Hanson, a senior economist at Bank of America Corp. in New York. The jump in completions “helps offset some of the upward pressure we’ve seen” on rents, said.
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Carlos Torres, Bloomberg
Late Filing Contractor Barred from Involving Subcontractors in Construction Defect Claim
March 01, 2012 —
CDJ STAFFThe Colorado Court of Appeals looked at that state’s Construction Defect Action Reform Act in determining if a general contractor could add subcontractors as third-party defendants to a construction defect lawsuit. Shaw Construction, LLC was the general contraction of the Roslyn Court condominium complex, and was sued by the homeowners’ association in a construction defect case. United Builder Services was the drywall subcontractor on the project. MB Roofing had installed roofs, gutters, and downspouts. The certificate of occupancy for the last building was issued on March 10, 2004. The project architect certified completion of all known remaining architectural items in June, 2004.
The HOA filed a claim against the developers of the property on January, 21, 2009. A week later, the HOA amended its complaint to add Shaw, the general contractor. Shaw did not file its answer and third-party complaint until March 29, 2010, sending its notice of claim under the CDARA on March 30.
The subcontractors claimed that the six-year statute of limitations had ended twenty days prior. Shaw claimed that the statute of limitations ran until six years after the architect’s certification, or that the HOA’s suit had tolled all claims.
The trial court granted summary judgment to the subcontractors, determining that “substantial completion occurs ‘when an improvement to real property achieves a degree of completion at which the owner can conveniently utilize the improvement of the purpose it was intended.’”
The appeals court noted that “Shaw correctly points out that the CDARA does not define ‘substantial completion.’” The court argued that Shaw’s interpretation went against the history and intent of the measure. “Historically, a construction professional who received a complaint responded by ‘cross-nam[ing] or add[ing] everybody and anybody who had a part to play in the construction chain.’” The court concluded that the intent of the act was to prevent unnamed subcontractors from being tolled.
The court further rejected Shaw’s reliance on the date of the architect’s certification as the time of “substantial completion,” instead agreeing with the trial court that “the architect’s letter on which Shaw relies certified total completion.”
The appeals court upheld the trial court’s determination that the statute of limitation began to run no later than March 10, 2004 and that Shaw’s complaint of March 29, 2010 was therefore barred. The summary judgment was upheld.
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Claim Preclusion: The Doctrine Everyone Thinks They Know But No One Really Knows What it Means in Practice
April 25, 2023 —
Garret Murai - California Construction Law BlogGenerally, I think restraint in litigation is a good thing. Don’t go crazy on your claims, don’t go nut-so in your discovery, and don’t present your case at trial in a way that causes the judge and/or jury to raise their eyebrows or shake their heads in disbelief. But, as with nearly everything, there’s always an exception. One of which is: don’t hold back on a claim because you “think” you might be able to bring it later, because you might not be able to as the next case, 5th and LA v. Western Waterproofing Company, Inc., 87 Cal.App.5th 781 (2023), demonstrates.
The 5th and LA Case
At the outset, let me first say how much I enjoyed reading this case based on the writing alone. The case, as the 2nd District Court of Appeals states, involves “a second lawsuit about an increasingly leaky roof.”
In 2012, property owner 5th and LA hired roofing contractor Western Waterproofing Company, Inc. to remove and recoat a parking lot that served also served as the roof over retail and office space below. Western completed its work in July 2012 and almost immediately 5th and LA noticed water that the coating was failing causing water leaks to the interior of the building.
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
San Francisco Half-Built Apartment Complex Destroyed by Fire
March 12, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to San Jose Mercury News, a 250 million dollar apartment complex being built in San Francisco, California received “catastrophic damage” from a fire on March 11th. The complex was being developed by BRE Properties, Inc., and “was slated to open sometime later this year.”
Initial reports blamed high winds for the start of the blaze, however, San Jose Mercury news reported that “downtown San Francisco experienced wind speeds of no more than 10 mph Tuesday, and that heavy winds were not expected Tuesday night” according to the National Weather Service.
“Representatives for [BRE Properties, Inc.] were not available for comment,” as reported by San Jose Mercury News.
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Insurer Unable to Declare its Coverage Excess In Construction Defect Case
January 06, 2012 —
CDJ STAFFThe Ninth Circuit Court of Appeals has upheld a summary judgment in the case of American Family Mutual Insurance Co. v. National Fire & Marine Insurance Co. Several other insurance companies were party to this case. In the earlier case, the US District Court of Appeals for Arizona had granted a summary judgment to Ohio Casualty Group and National Fire & Marine Insurance Company. At the heart of it, is a dispute over construction defect coverage.
The general contractor for Astragal Luxury Villas, GFTDC, contracted with American Family to provide it with a commercial liability policy. Coverage was issued to various subcontractors by Ohio Casualty and National Fire. These policies included blanket additional insured endorsements that provided coverage to GFTDC. The subcontractor policies had provisions making their coverage excess over other policies available to GFTDC.
The need for insurance was triggered when the Astragal Condominium Unit Owners Association filed a construction defect claim in the Arizona Superior Court. CFTDC filed a third-party claim against several subcontractors. The case was settled with American Family paying the settlement, after which it filed seeking reimbursement from the subcontractor’s insurers. The court instead granted summary judgment in favor of Ohio Casualty and National Fire.
American Family appealed to the Ninth Circuit for a review of the summary judgment, arguing that the “other insurance” clauses were “mutually repugnant and unenforceable.” The Ninth Circuit cited a case from the Arizona Court of Appeals that held that “where two policies cover the same occurrence and both contain ‘other insurance’ clauses, the excess insurance provisions are mutually repugnant and must be disregarded. Each insurer is then liable for a pro rate share of the settlement or judgment.”
The court noted that unlike other “other insurance” cases, the American Family policy “states that it provides primary CGL coverage for CFTDC and is rendered excess only if there is ‘any other primary insurance’ available to GFTDC as an additional insured.” They note that “the American Family policy purports to convert from primary to excess coverage only if CFTDC has access to other primary insurance as an additional insured.”
In comparison, the court noted that “the ‘other insurance’ language in Ohio Casualty’s additional insured endorsement cannot reasonably be read to contradict, or otherwise be inconsistent with, the ‘other primary insurance’ provision in the American Family policy.” They find other reasons why National Fire’s coverage did not supersede American Family’s. In this case, the policy is “written explicitly to apply in excess.”
Finally, the Astragal settlement did not exhaust American Family’s coverage, so they were obligated to pay out the full amount. The court upheld the summary dismissal of American Family’s claims.
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OSHA Releases COVID-19 Guidance
June 15, 2020 —
L. Stephen Bowers & Joshua Tumen - White and Williams LLPThe United States Department of Labor’s Occupational Safety and Health Administration (OSHA) ensures safe and healthful working conditions for employees by setting and enforcing standards and by providing training, outreach, education and assistance.
The COVID-19 outbreak has increased demand for N95 filtering face piece respirators (N95 FFRs), limiting availability for workers in healthcare and emergency response. On April 3, 2020, OSHA issued interim guidance for employers to combat the supply shortages of N95 FFRs and to comply with the respiratory protection standard (29 CFR § 1910.134). This guidance will remain in effect until further notice and applies in all industries.
Employers must continue to manage their respiratory protection programs and be mindful of N95 FFR shortages. Specifically, employers should identify and evaluate respiratory hazards in the workplace, and develop and implement written respiratory protection programs. Businesses should reassess their engineering controls, work practices, and administrative controls to identify any changes they can make to decrease the need for N95 FFRs. Some examples provided in the guidance include using portable local exhaust systems or moving operations outdoors. Employers may also consider temporarily suspending non-essential operations, to the extent such operations are not already suspended due to state mandates.
Reprinted courtesy of
L. Stephen Bowers, White and Williams LLP and
Joshua Tumen, White and Williams LLP
Mr. Bowers may be contacted at bowerss@whiteandwilliams.com
Mr. Tumen may be contacted at tumenj@whiteandwilliams.com
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Mitigate Construction Risk Through Use of Contingency
April 26, 2021 —
Laurie A. Stanziale - Construction ExecutiveMitigation of risk and costs in a construction project are always priorities for owners. In some contracts, in particular, Guaranteed Maximum Price contracts, some of those monetary risks are shifted to the contractor. Contingency is important because it allows for money to be in the budget for the unexpected and to keep the project moving, which benefits everyone.
WHAT IS CONTINGENCY?
Contingency is an amount of money built into the contractor’s price to complete the project to address unforeseen (although sometimes very common) costs that arise. This sum of money is generally referred to as the contractor’s contingency. The amount of the contingency is a balance struck between having money on hand to address the unexpected while also not unnecessarily tying up money that could otherwise be used for the project. Contingency is typically 5-10% of the hard costs. However, how the money is actually allocated during the project is not always well thought out, which can be the source of problems during the project.
The contractor’s contingency is not to be confused with an owner’s contingency (or reserve) which is outside of the contractor’s budget and generally used for owner driven changes to the project, such as changes to scope, design and schedule.
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Laurie A. Stanziale, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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